The California Competes Tax Credit is an income tax credit available to businesses that want to locate in California or stay and grow in California. Tax credit agreements are negotiated by GO- Biz and approved by a statutorily created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.
The Governor’s Office of Business and Economic Development (GO-Biz) recently announced that $151.1 million was available for the California Competes Credit for fiscal year 2014-15. That sum is woefully inadequate in a state as large and diversified as California.
Last year a total of 396 companies applied and requested more than $500 million but only 31 companies were selected; and, those 31 companies were only allocated a portion of a total credit amounting to $30 million. That sum was also woefully inadequate. The Top 10 recipients recommended to receive these credits included:
|Company||Tax Credits||Investment||Net Increase in F/T Employees|
|1||Samsung Semiconductor, Inc.||$6,000,000||$357,764,000||400|
|2||Petco Animal Supplies, Inc.||$2,600,000||$84,000,000||263|
|3||Samsung Information Systems America, Inc.||$2,000,000||$128,333,935||210|
|4||Amazon Fulfillment Services, Inc.||$1,575,000||$225,000,000||1,550|
|5||A2Z Development Center, Inc.||$1,200,000||$55,000,000||798|
|6||Graphic Packaging International, Inc.||$1,150,000||$54,228,200||138|
|8||Novartis Pharmaceuticals Corp.||$1,000,000||$104,800,000||28|
|9||Weber Metals, Inc.||$1,000,000||$170,703,000||60|
|10||Hyundai Capital America||$885,000||0||120|
Now, each of these companies must create new jobs and invest in their California plants and equipment. I applaud that fact but I must point out that thousands of other California companies are being bypassed to assist these 31 lucky firms. It simply is unfair and will continue to lead to more companies departing California for greener pastures. One excellent example is Tesla’s new battery factory that picked Nevada over California despite heavy lobbying by politicians. Allegedly, Tesla was offered $1 billion in tax credits by Nevada. That is far cry from $181 million available in California for 2013-15. California is not competitive and its California Competes Credit is a joke. Wake up Sacramento politicians. You’re killing jobs here and driving companies out of our state. We need companies creating jobs by the thousands not by a few hundred, and we need the credits offered to be in excess of $1 billion annually.